I have to agree with dfaiella. If you are looking to get a loan, then under the right circumstances I think a 401k is an appropriate place. The double taxation argument is irrelevant except for buying a house. The choice is between paying interest to your 401k loan where it will later be taxed, or paying it to some other lending institution where it is just gone.

To me it seems that the only difference between a 401k and another type of loan is the risk associated with job security, and the opportunity cost of not having the money invested elsewhere. In the specific case that dfaiella mentioned, the opportunity cost was minimized because fixed income securities were used to pay for the loan, which is itself just another type of fixed income security.

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